Treasurer Josh Frydenberg mapped out how the Federal Budget aims to grow a modern and resilient manufacturing industry in last night’s budget announcement.
“COVID and events in Ukraine have been a powerful reminder that we must increase our self‑reliance. Australia has a world‑class manufacturing sector. Tonight, we announce new funding to solve for vulnerabilities in our supply chains,” Frydenberg said.
“New funding to make Victoria the first place in the southern hemisphere to manufacture mRNA vaccines. New funding to drive collaboration between our universities, CSIRO and industry to rapidly commercialise new technologies in clean energy, medical supplies, defence and other high priority areas. And a new patent box for the agriculture and low‑emissions technology sectors. This will see income from new patents developed in Australia taxed at almost half the rate that applies to large companies.”
The Australian manufacturing industry will benefit from over $1 billion in new investment, building on the existing Modern Manufacturing Strategy. This will help to secure supply chains and jobs in a period of heightened global uncertainty. An additional $200 million in funding is also being provided as part of the Regional Accelerator Program to strengthen sovereign manufacturing capability.
$53.9 million will be committed to round three of the Manufacturing Modernisation Fund, to co-fund capital investments for small and medium manufacturers, and $4.7 million will support women in building careers in Australian manufacturing.
The federal government has also stipulated that it will work with industry over the next 12 months to finalise Manufacturing Investment Plans for each National Manufacturing Priority sector. The aim is to better guide further long-term investment in Australian manufacturing, with steps specific to each sector.A
“Our Modern Manufacturing Strategy is already delivering and accelerating the transformation of Australian manufacturing and now we want to further supercharge its job-creating power,” minister for Industry, Energy and Emissions Reduction Angus Taylor commented.
“Manufacturing is an essential driver of skills, jobs and capability. The ability to make things here and do it well is critical to our economy and our economic plan.”
Skills and training
There will also be $2.8 billion allocated to support apprenticeships, and $3.7 billion in funding for a new skills agreement that could deliver up to 800,000 training places.
In addition to this, the Budget will include $2.2 billion for a research commercialisation action plan – including a new economic accelerator – to facilitate R&D.
“The Budget provides a welcome investment in skills development and training,” Ai Group chief executive Innes Willox said. “The extension of existing support and the new apprentice incentives for employers and apprentices themselves, as well as the measure boosting the incentive for small businesses to invest in the skills of their employees are important down-payments on this critical area.
“The National Skills Agreement between the Commonwealth and the states and territories has the potential to further drive skills development, but remains outstanding.”
It was also announced that $37.9 billion will support regional Australia and priority infrastructure, including $7.1 billion for investments in the NT, north and central Queensland, the Pilbara and the Hunter regions that will focus on production in low emissions manufacturing, agriculture and renewable energy.
The Australian Academy of Technology and Engineering (ATSE) believe this funding is a starting point, yet a long-term holistic strategy is still needed.
“We welcome funding for green energy infrastructure and expanding the STEM workforce,” ATSE president Hugh Barlow said. “However, this budget does not represent a comprehensive and evidence-based investment to decarbonise, or develop the essential foundational skills required for the aspirational technology-forward economy the government has envisaged.”
For Defence, the federal government is aiming to increase the Australian Defence Force up to 18,500 by 2040.
Notably, it will also provide $9.9 billion over a period of 10 years to enhance national offensive and defensive cyber and intelligence capabilities. This will come under a program named REDSPICE (Resilience, Effects, Defence, Space, Intelligence, Cyber and Enablers).
“With cyber security a major issue for business and the country, the significant and forward-looking investment in Australia’s cyber capabilities is a recognition of the increased threats we will be facing,” Willox said.